Collins & Aikman Announces Results for Q4 and Year Ended Dec 31, 2000
TROY, Mich.--Feb. 21, 2001--Collins & Aikman Corporation today reported fourth quarter and annual results for its fiscal period ended December 31, 2000. For the current fiscal quarter, the Company reported sales of $436.8 million, operating income of $2.0 million and a net loss of $15.9 million, or ($0.26) per diluted share. Operating income in the quarter was impacted by approximately $18.0 million in one-time costs and write-offs, the majority of which were non-cash related.Recent Highlights Include:
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| -- | First step of Heartland Industrial Partners, L.P. (Heartland) investment in Collins & Aikman announced -- Significant capital infusion to enhance global growth opportunities. |
| -- | Introduced AcT(TM) (Acoustically Tuned Technologies) -- Revolutionary industry development for acoustically tuning vehicles. |
| -- | Completed acquisition of COMET(TM) Acoustic Software -- Leadership in acoustic modeling and predictive capabilities further enabling "bumper-to-bumper" NVH solutions. |
| -- | Announced new business awards in Europe with Renault, GM and Chrysler -- Continuing to enhance European presence. |
| -- | Received Toyota Quality Alliance Gold Supplier Award and KIA Most Valued Partner Award -- Strong commitment to providing excellent service, quality, value and delivery. |
Commenting on the Company's fourth quarter results, Collins & Aikman's Chairman and Chief Executive Officer, Thomas E. Evans, stated, "Although our fourth quarter operating income was impacted in total by approximately $18.0 million in one-time costs and write-offs, our reported financial performance in the quarter was disappointing. Despite the benefits realized from our restructuring actions, the current operating environment has caused our customers to ratchet production down far quicker than expected and simultaneously toughen their positions on a variety of commercial issues. To offset this, we are taking an aggressive stance on all spending, including limitations on all discretionary expenses and implementation of a global hiring freeze. Additionally, we are actively assessing our entire organizational structure and associated staffing levels, and anticipate quickly taking some significant actions to further lower our costs. In terms of capital spending, we are realigning our capital spending initiatives so as to further enhance productivity. Although these actions are difficult, we will continue to vigorously respond to market conditions and position Collins & Aikman to achieve the growth, debt coverage and cash generating goals to which we remain committed."
Fourth Quarter Performance Highlights
-------------------------------------
For the fourth quarter 2000, the Company reported a net loss of $15.9 million, or ($0.26) per diluted share. In the fourth quarter of 1999, the Company earned net income of $6.6 million, or $0.11 per diluted share, excluding a pre-tax restructuring charge of $13.5 million, or $0.15 per diluted share after-tax.
Operating income for the fourth quarter 2000 was $2.0 million, which in addition to lower vehicle production and an unfavorable business mix, was negatively impacted by approximately $18.0 million in one-time costs and write-offs. In the fourth quarter of 1999, operating income was approximately $35.6 million, excluding the previously mentioned restructuring charge, or $22.0 million as reported. Free cash flow for the quarter was $50.8 million, compared to $87.3 million in the 1999 fourth quarter, which also excludes the previously mentioned restructuring charge. For the quarter ended December 31, 2000, the Company had approximately 62.0 million shares outstanding on a weighted average diluted basis, versus 62.5 million in the year ago period, excluding the restructuring charge.
Net sales for the 2000 fourth quarter were down 14 percent to $436.8 million, as compared with $505.6 million in the fourth quarter of 1999. Relative to the fourth quarter 1999, fourth quarter 2000 sales were negatively impacted by approximately $38 million due to a change in the Company's fiscal calendar and by approximately $14 million due to the negative impact of foreign currency translation. Net sales were also negatively impacted by a six percent decline in North American light vehicle production and a three percent decline in European light vehicle production. As a result, sales for the Company's North American Automotive Interior Systems Division decreased approximately 15 percent to $267.1 million, while in Europe, sales declined 21 percent to $65.4 million, as compared to $82.9 million in the fourth quarter of 1999. Sales for the Company's Specialty Automotive Products Division decreased three percent to $104.3 million, versus $107.0 million in the fourth quarter of 1999.
Year-To-Date Performance Highlights
-----------------------------------
For the twelve months ended December 31, 2000, the Company earned net income of $4.5 million, or $0.07 per diluted share; reflecting a net loss from continuing operations of $1.4 million, or ($0.03) per diluted share, net income from discontinued operations of $6.6 million, or $0.11 per diluted share and an extraordinary charge for early debt retirement of $0.7 million, or ($0.01) per diluted share. For the twelve months ended December 25, 1999, the Company earned net income of $20.1 million, or $0.32 per diluted share, excluding 1999 pre-tax restructuring charges of $33.4 million, or ($0.34) per diluted share after-tax, and the cumulative after-tax effect of a change in accounting principle of $8.9 million, or ($0.14) per diluted share.
Operating income for the full year 2000 was $108.1 million, as compared to twelve month 1999 performance of approximately $131.9 million, excluding the previously mentioned 1999 restructuring charges. Despite the decline in operating income, year-to-date free cash flow of $168.5 million, exceeded 1999's performance of $167.7 million, which excludes the previously mentioned restructuring charges. For the twelve months ended December 31, 2000, weighted average diluted shares outstanding were 62.4 million, unchanged from a year ago, excluding restructuring charges and the cumulative effect of a change in accounting principle.
Year-to-date, consolidated sales for 2000 were relatively flat with the prior year at approximately $1.9 billion. Strong sales during the first half of the year were partially offset by an eight percent sales decline in the second half of the year. Overall, sales for the North American Automotive Interior Systems Division rose two percent to $1.2 billion, while sales for the European Automotive Interior Systems Division decreased seven percent to $284.5 million. Sales for the Specialty Automotive Products Division were $441.7 million versus 440.5 million the prior year, as higher fabric sales offset a 30% decline in Chrysler Sebring convertible volume.
Evans continued, "Despite current industry conditions, I believe that Collins & Aikman is better positioned than ever for future growth, and with Heartland's investment, we have another highly supportive capital partner to assist us in this regard. Our acoustic resources and customer offerings have been substantially enhanced through our new global technology structure, the recently announced family of AcT(TM) acoustically tuned products and the completion of our Comet Acoustics acquisition. Additionally, we're aggressively tackling cost cutting throughout the Company and our business backlog remains solid. Telematics and systems integration continue to accelerate, and we view these long-term industry trends as important drivers for our growth. In summary, although we remain cautious in the short-term, the long-term outlook for Collins & Aikman remains quite bright."
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except for per share data)
Quarter Ended
----------------------------------------
Adjusted(1)
December 31, December 25, December 25,
2000 1999 1999
---------- ---------- ----------
Net sales $ 436,848 $ 505,566 $ 505,566
Cost of goods sold 391,219 433,862 433,862
---------- ---------- ----------
Gross profit 45,629 71,704 71,704
Selling, general and
administrative expenses 43,607 36,115 36,115
Restructuring charge - 13,544 -
---------- ---------- ----------
Operating income 2,022 22,045 35,589
Interest expense, net 23,889 24,224 24,224
Loss on sale of receivables 1,725 1,521 1,521
Other expense (income) 558 (627) (627)
---------- ---------- ----------
Income (loss) before
income taxes (24,150) (3,073) 10,471
Income tax expense (benefit) (8,272) (558) 3,885
---------- ---------- ----------
Net income (loss) $ (15,878) $ (2,515) $ 6,586
========== ========== ==========
Net income (loss) per basic
and diluted common share: $ (0.26) $ (0.04) $ 0.11
========== ========== ==========
Average common shares outstanding:
Basic 61,997 61,913 61,913
========== ========== ==========
Diluted 61,997 61,913 62,531
========== ========== ==========
(1) Excludes restructuring charge
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except for per share data)
Twelve Months Ended
----------------------------------------
Adjusted(1)
December 31, December 25, December 25,
2000 1999 1999
(53 weeks) (52 weeks) (52 weeks)
------------ ------------ ------------
Net sales $ 1,901,819 $ 1,898,597 $ 1,898,597
Cost of goods sold 1,635,178 1,613,880 1,613,880
------------ ------------ ------------
Gross profit 266,641 284,717 284,717
Selling, general and
administrative expenses 158,556 152,807 152,807
Restructuring charges - 33,391 -
------------ ------------ ------------
Operating income 108,085 98,519 131,910
Interest expense, net 96,589 92,045 92,045
Loss on sale of receivables 9,227 5,356 5,356
Other expense 1,454 2,237 2,237
------------ ------------ ------------
Income (loss) before
income taxes 815 (1,119) 32,272
Income tax expense 2,252 246 12,169
------------ ------------ ------------
Income (loss) from continuing
operations before extraordinary
charge and cumulative effect of
a change in accounting principle (1,437) (1,365) 20,103
Income from discontinued
operations, net of income
taxes of $4,400 6,600 - -
------------ ------------ ------------
Income (loss) before extraordinary
charge and cumulative effect of
a change in accounting principle 5,163 (1,365) 20,103
Extraordinary charge, net of
income taxes of $457 (686) - -
Cumulative effect of a change in
accounting principle, net of
income taxes of $5,083 - (8,850) -
------------ ------------ ------------
Net income (loss) $ 4,477 $ (10,215) $ 20,103
============ ============ ============
Net income (loss) per basic
and diluted common share:
Continuing operations $ (0.03) $ (0.02) $ 0.32
Discontinued operations 0.11 - -
Extraordinary charge (0.01) - -
Cumulative effect of a change
in accounting principle - (0.14) -
------------ ------------ ------------
Net income (loss) $ 0.07 $ (0.16) $ 0.32
============ ============ ============
Average common shares outstanding:
Basic 61,909 61,952 61,952
============ ============ ============
Diluted 62,355 61,952 62,384
============ ============ ============
(1) Excludes restructuring charges and the cumulative effect of a
change in accounting principle
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
December 31, December 25,
ASSETS 2000 1999
------------ ------------
Current Assets:
Cash and cash equivalents $ 20,862 $ 13,980
Accounts and other receivables, net 196,451 233,819
Inventories 131,720 132,625
Other 75,852 84,942
------------ ------------
Total current assets 424,885 465,366
Property, plant and equipment, net 434,147 443,526
Deferred tax assets 97,314 86,235
Goodwill, net 245,509 256,362
Other assets 78,435 97,401
------------ ------------
$ 1,280,290 $ 1,348,890
============ ============
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
Current Liabilities:
Short-term borrowings $ 3,835 $ 3,088
Current maturities of long-term debt 84,302 27,992
Accounts payable 178,483 198,466
Accrued expenses 123,109 132,709
------------ ------------
Total current liabilities 389,729 362,255
Long-term debt 799,677 884,550
Other, including post-retirement
benefit obligation 245,870 253,206
Commitments and contingencies
Common stock (150,000 shares authorized,
70,521 shares issued and 62,024 shares
outstanding at December 31, 2000 and
70,521 shares issued and 61,904 shares
outstanding at December 25, 1999) 705 705
Other paid-in capital 585,481 585,484
Accumulated deficit (636,639) (641,117)
Accumulated other comprehensive loss (42,925) (33,260)
Treasury stock, at cost (8,497 shares at
December 31, 2000 and 8,617 shares at
December 25, 1999) (61,608) (62,933)
------------ ------------
Total common stockholders' deficit (154,986) (151,121)
------------ ------------
$ 1,280,290 $ 1,348,890
============ ============
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Quarter Ended
---------------------------------
December 31, December 25,
2000 1999
(13 weeks) (13 weeks)
------------- --------------
OPERATING ACTIVITIES
Loss from continuing operations $ (15,878) $ (2,515)
Adjustments to derive cash flow
from continuing operating
activities:
Impairment of long-lived assets - 7,768
Deferred income tax
expense (benefit) (10,398) 2,567
Depreciation and amortization 21,744 19,530
Decrease in accounts and other
receivables 40,412 1,601
Decrease in inventories 7,727 22,866
Increase (decrease) in
accounts payable 3,722 38,890
Increase (decrease) in
interest payable (12,812) (13,645)
Other, net (1,510) (11,443)
------------- --------------
Net cash provided by continuing
operating activities 33,007 65,619
------------- --------------
Net cash provided by (used in)
discontinued operations (1,872) (10,984)
------------- --------------
INVESTING ACTIVITIES
Additions to property, plant
and equipment (24,810) (31,218)
Sales of property, plant
and equipment 3,711 173
Other, net - 1,717
------------- --------------
Net cash used in investing
activities (21,099) (29,328)
------------- --------------
FINANCING ACTIVITIES
Issuance of long-term debt - -
Repayment of long-term debt (7,298) (5,272)
Proceeds from (reduction of)
participating interests in
accounts receivable (32,476) 8,100
Net borrowings (repayments) on
revolving credit facilities 22,806 (27,691)
Increase (decrease) on
short-term borrowings (4,336) (8,610)
Dividends paid - -
Reissuance (purchase) of
treasury stock, net 475 (505)
Other, net - (1,736)
------------- --------------
Net cash used in financing
activities (20,829) (35,714)
------------- --------------
Net increase (decrease) in
cash and cash equivalents (10,793) (10,407)
Cash and cash equivalents at
beginning of period 31,655 24,387
------------- --------------
Cash and cash equivalents at
end of period $ 20,862 $ 13,980
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COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Twelve Months Ended
---------------------------------
December 31, December 25,
2000 1999
(53 weeks) (52 weeks)
------------- --------------
OPERATING ACTIVITIES
Loss from continuing operations $ (1,437) $ (1,365)
Adjustments to derive cash flow
from continuing operating
activities:
Impairment of long-lived assets - 13,361
Deferred income tax
expense (benefit) (8,545) (6,800)
Depreciation and amortization 76,436 71,474
Decrease in accounts and other
receivables 78,214 1,826
Decrease in inventories 905 20,215
Increase (decrease) in
accounts payable (19,983) 28,658
Increase (decrease) in
interest payable 3,434 946
Other, net 8,089 (28,455)
------------- --------------
Net cash provided by continuing
operating activities 137,113 99,860
------------- --------------
Net cash provided by (used in)
discontinued operations 357 (16,770)
------------- --------------
INVESTING ACTIVITIES
Additions to property, plant
and equipment (75,120) (86,430)
Sales of property, plant
and equipment 5,543 10,126
Other, net - (1,225)
------------- --------------
Net cash used in investing
activities (69,577) (77,529)
------------- --------------
FINANCING ACTIVITIES
Issuance of long-term debt - 100,000
Repayment of long-term debt (67,343) (20,607)
Proceeds from (reduction of)
participating interests in
accounts receivable (34,046) 2,000
Net borrowings (repayments) on
revolving credit facilities 38,405 (35,293)
Increase (decrease) on
short-term borrowings 1,581 (7,405)
Dividends paid - (50,198)
Reissuance (purchase) of
treasury stock, net 392 (2,097)
Other, net - (1,736)
------------- --------------
Net cash used in financing
activities (61,011) (15,336)
------------- --------------
Net increase (decrease) in
cash and cash equivalents 6,882 (9,775)
Cash and cash equivalents at
beginning of period 13,980 23,755
------------- --------------
Cash and cash equivalents at
end of period $ 20,862 $ 13,980
============= ==============
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
FOURTH QUARTER 2000 - SUPPLEMENTAL SCHEDULE
(Unaudited - in millions, except CPV)
SALES DATA:
-----------
Quarter Ended
--------------------------
DIVISION: December 31, December 25,
2000 1999
(13 weeks) (13 weeks)
------------ ------------
North American Automotive Interior Systems $ 267 $ 316
European Automotive Interior Systems 66 83
Specialty Automotive Products 104 107
------------ ------------
Total $ 437 $ 506
============ ============
Twelve Months Ended
--------------------------
DIVISION: December 31, December 25,
2000 1999
(53 weeks) (52 weeks)
------------ ------------
North American Automotive Interior Systems $ 1,176 $ 1,152
European Automotive Interior Systems 284 306
Specialty Automotive Products 442 440
------------ ------------
Total $ 1,902 $ 1,898
============ ============
OPERATING INCOME (LOSS)(a):
---------------------------
Quarter Ended
--------------------------
DIVISION: December 31, December 25,
2000 1999
(13 weeks) (13 weeks)
------------ ------------
North American Automotive Interior Systems $ 10 $ 34
European Automotive Interior Systems (8) (5)
Specialty Automotive Products 3 7
Other (3) -
------------ ------------
Total $ 2 $ 36
============ ============
Year-to-Date
-------------------------
DIVISION: December 31, December 25,
2000 1999
(53 weeks) (52 weeks)
------------ ------------
North American Automotive Interior Systems $ 87 $ 89
European Automotive Interior Systems 1 2
Specialty Automotive Products 23 40
Other (3) 1
------------ ------------
Total $ 108 $ 132
============ ============
STATISTICAL DATA:
-----------------
Quarter Ended
--------------------------
December 31, December 25,
2000 1999
(13 weeks) (13 weeks)
------------ ------------
EUROPEAN CPV $ 13 $ 16
N. AMERICAN CPV $ 88 $ 91
EBITDA(a) $ 24 $ 55
CAPITAL EXPENDITURES $ 25 $ 31
FREE CASH FLOW(b) $ 51 $ 87
Twelve Months Ended
--------------------------
December 31, December 25,
2000 1999
(53 weeks) (52 weeks)
------------ ------------
EUROPEAN CPV $ 14 $ 15
N. AMERICAN CPV $ 89 $ 88
EBITDA(a) $ 185 $ 203
CAPITAL EXPENDITURES $ 75 $ 86
FREE CASH FLOW(b) $ 169 $ 168
(a) 1999 Excludes restructuring charges.
(b) Free Cash Flow equals EBITDA (excluding restructuring charges)
less capital expenditures, plus/minus the operating change in accounts
receivable, accounts payable, and inventory.